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Apollo to complete its conversion into a corporation in September

Apollo Global Management LLC announced that it will complete its conversion into a corporation from a publicly traded partnership on Sept. 5.

Various Apollo executives, including founders Leon Black, Josh Harris and Marc Rowan, intend to give a portion of their stakes to charity. The units, which are worth about $600 million based on recent trading prices, would first be converted to class A shares and then donated to charity over time, the company said.

Various alternative asset managers and private equity firms have made similar moves to convert to corporations, or have announced their intentions to do so, including Blackstone Group Inc., Carlyle Group LP, Ares Management Corp. and KKR & Co. Common reasons cited for converting to a corporation include having a larger pool of investors and taking advantage of the corporate tax cut signed into law in 2017.

An analysis by Blackstone indicated that more than 60% of the U.S. long-only market, around $7.5 trillion, is restricted from investing in partnerships. For investment in corporations, that number drops to 25%, or $3.0 trillion.

Blackstone CEO and Chairman Steve Schwarzman suggested that restrictions on owning publicly traded partnerships led the private equity giant's shares to trade at a discount despite the company outperforming the market "on most metrics."

Carlyle co-CEO Kewsong Lee said he expects his company to unlock more than $3 trillion of passively benchmarked assets by converting to a corporation, which he expects to significantly diversify the shareholder base.